Category: Collaborative Age value production system

How to Develop Realistic Expectations for Mega-Projects

This interesting podcast and post from Freakonomics website ‘Here’s Why All Your Projects Are Always Late — and What to Do About It‘ proposes a good analysis of all the reasons why mega-projects, and particularly public mega-projects, always fall so dramatically behind in terms of expectations.

All the usual fallacies and symptoms applicable to large complex projects are mentioned in a quite good synthesis and summary: the planning fallacy (overly optimism in spite of historical evidence to the contrary); optimism biais; neglecting the time and effort for coordination; student’s effect (procrastination); inadequate expectations set to sell a public project, etc.

The interesting approach mentioned at the end of the post as being possibly a successful approach is to align estimates for time and cost (or overruns) for new projects on the observed history of similar projects. This seems to be applied today in the UK. The post mentions that this approach seems to “be reasonably accurate and the cost overruns to be reasonably small — about 7 percent from the planning stages of a transportation project to completion. All of which suggests that pricing in the optimism bias and using reference-class forecasting are truly useful tools to fight the planning fallacy.” This approach can only work of course if there is a representative database of similar past projects, which is not always the case. For example it is known that some major UK infrastructure megaprojects such as High Speed train lines do still face huge overruns in schedule and cost.

Megaprojects failure to deliver on time and on budget is a major societal issue (and the sunk cost fallacy leads us to finish those projects even if they appear to be grossly failing). I am not sure the solution is as simple as the solution mentioned in the post, but it worth noting that some governments have identified the issue and try to address it proactively.

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How To Avoid Losing Our Identity While Collaborating With AI

Following on our previous post ‘How We Need to Learn to Work with AI‘, there are also interesting points of view of how AI may lead to losing our identity, such as this article ‘Would You Survive a Merger with AI?‘

This article is focused on actual hybridation between humans and machine (a physical merger of sorts) but takes it at the philosophical level. It then shows that we can’t at the same time merge with AI, or replicate ourselves, without losing our identity.

There are thus some limits (luckily, quite remote and still very much science-fiction) beyond which our joint working with AI may lead to losing our identity, or being unclear about it.

In the short term, in order to benefit from AI without losing our identity, it may be a good idea to make sure we keep some of our identity to ourselves and do not share everything with AI, however enticing this may look!

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How We Need to Learn to Work with AI

This article ‘Humans and AI will work better when they start learning from each other‘ is part of a growing realization that AI will enhance human capabilities rather than compete or replace them.

“Trust plays a significant role in decreasing the cognitive complexity users face in interacting with sophisticated technology. Consequently, its absence leads to an AI model’s underutilization or abandonment“. “Technology will be just as good if all groups understand the evidence behind it and prepare themselves to use it effectively“.

While there are ways to improve the interaction with AI and still substantial progress is required in this area (interface design, etc), end-users must also learn to deal with, and understand the limits of AI. This is new skill-set that will need to be learnt and taught in the future.

We can expect a few years of soul-searching, finding ways to leverage better those AI engines that are pervading our lives, while those AI persona and their interface will also quickly improve.

We need to learn how to leverage the AI capabilities now available. This will take time to become a clear skill-set and I am quite excited to see how this will get formalized in terms of behaviors and adaptation of AI interfaces.

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How To Avoid that Increasing Complexity of Business Leads to Collapse

In this Gapingvoid post about business complexity, that refers to a Clay Shirky 2010 post ‘The Collapse of Complex Business Models‘, we are reminded that excessive increase in complexity often leads to collapse of organisations or societies (and not to improved adaptability).

Organisations and societies would sometime collapse because of their sophistication. According to some studies, increase in complexity is first positive, before reaching a point of diminishing returns and even becoming detrimental. And “When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.”

The issue here is not that complexity inevitably increases in organizations and societies. It does. The issue is how to ensure that this additional complexity makes the organization or society more flexible and adaptable to substantial changes and shifts in its environment – and not too rigid, leading to collapse.

In the business world I know only of one solution: allowing new activities to develop in relatively independent subsidiaries. They may one day replace the mother company as values shift, but then the accretion of new activities won’t create excessive additional complexity and the various activities remain relatively flexible and nimble. The case for the diversified group of companies as a way to be more resilient is open!

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How the Economy Increasingly Becomes a Project Economy

In this post ‘Welcome to the Project Economy‘, an interesting perspective if given on the transformation of economic activity towards a project-based activity (to be taken with a pinch of salt though, the author being part of PMI and thus promoting project-specific training and certification).

Still, the historical perspective provided in the post is interesting and quite aligned with my views. “A century [after the Industrial Revolution], the future of work has once again become a central topic. Technological advancements and automation are provoking a business transformation every bit as radical as the one set in motion a hundred years ago.” “Amidst all this chaos, one thing is clear: the 4th Industrial Revolution has unleashed The Project Economy. The fusion of physical and digital in a desire to blend speed and precision as organizations integrate strategy design and delivery, is taking hold in broader and more sophisticated ways“. The post goes on to give interesting examples in a number of companies and industries.

I certainly concur about this transformation and this explains why I am passionate about project management. At the same time, there are many different types of projects and ways to approach them, and it may be a bit excessive to broaden the concept too much or to try to put all projects under the same approaches and methods.

What’s exciting is that each project remains a single human adventure involving a limited team to create new stuff that may change the world. How many projects are you in at the moment?

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How the Number of Publicly Listed Companies Decreases

In this otherwise illuminating post ‘Fixing Capitalism’s Oligopoly: A Response To Ray Dalio And John Mauldin‘ I noticed a particular aspect, which is the strong decrease of the number of publicly listed companies in favor of private capital.

This trend is very noticeable since the end of the 1990’s. “The phenomenon is under-researched, but the papers that have been done look at issues like 1) impact of Sarbanes-Oxley (SOX), 2) growth of private equity capital, 3) the growth of M&A activity on Wall St and its need to keep the pipeline growing, and 4) a number of structural issues (like SOX) hurting small company formation“. The author believes that it is mostly the growth of private capital that explains this trend, which in turns tends to explain the much higher share of income captured by the wealthy (company owners). Another aspect is the increasing industry concentration with very large players that attain quasi monopolistic status.

This trend is at the same time interesting and problematic. It shows that probably a greater share of value creation is not directly accessible by the public through public shares. This, in turn, generates a number of interesting questions about the structure of our economy. Its agility is in question, and thus its future adaptability. Not quite the trend that would be expected in an increasingly unpredictable world.

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How Night Lights Illustrate Economic Development

This excellent YouTube Video shows how night light illustrates the level of economic development.

The illustration around how lights went off in Syria during the civil war, or the contrast between North and South Korea, or the evolution of India’s lighting levels over a short decade are great illustrations of how to witness economic development in a qualitative manner.

At the same time it reminds us that even the billion humans we are are but a few spots on the entire earth surface, and how quickly that little flicker of light can get extinguished should keep us quite humble!

Hat tip to Alex Tabarrok in the Marginal Revolution blog.

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How the Former Sedentary Elite Reacts Against the New Nomadic Elite

Following up on our post ‘How the Notion of Country Is Becoming Progressively Obsolete‘, we can observe increasingly how the Industrial Age sedentary elite is reacting against an increasingly powerful nomadic elite.

My observation of the Fourth Revolution is that the revolution in communication capabilities places back the global nomad at the top of social and value hierarchy, after it had been displaced during the Agricultural and Industrial Age which depended a lot on huge local investments. The opposition and struggle between sedentary and nomads is age-old and it just took a new turn.

Many social movements such as the ‘Gilets Jaune’ in France, and more generally the crisis of local communities, can be connected to this major change. In addition to local territories, local elites feel displaced as more value is now captured by global nomads. This leads to strong reactions and struggles, one clear path being protectionism as an illusory protection against this trend. But that obviously can’t be effective if one also wants to benefit from modern connectivity at the same time.

This readjustment of the value chain benefiting nomads will be a major social trend in the next decades and an interesting way to understand what is happening globally. Still I believe the trend can’t be resisted and the future Collaborative Age elite will definitely be global nomads.

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How the American Dream of Social Mobility actually Disappears

In this excellent must-read article ‘The Economist Who Would Fix the American Dream‘, the work of economist Raj Chetty is described. His recent works focuses on equal opportunity. And shows that since a few decades, the possibility of social mobility has dramatically diminished in the US. But not only is he a scholar providing insights from Big Data, he is also taking action.

Raj Chetty’s family story itself is an example of social mobility: his parents had a humble and poor origin in India and they rose in society through academic excellence, then emigrated to the US where Raj was educated. Excelling in academics, he became quickly part of the elite of economists in the USA.

“He has pioneered an approach that uses newly available sources of government data to show how American families fare across generations, revealing striking patterns of upward mobility and stagnation. In one early study, he showed that children born in 1940 had a 90 percent chance of earning more than their parents, but for children born four decades later, that chance had fallen to 50 percent, a toss of a coin” And he has shown that to a “surprising degree, people’s financial prospects depend on where they happen to grow up“.

Some of his most interesting research about a town in the US that had a dramatic positive growth showed that “All the data-scientist and business-development-analyst jobs in the thriving banking sector are a boon for out-of-towners and the progeny of the well-to-do, but to grow up poor in Charlotte is largely to remain poor.”: nomads and well-to-do benefit from opportunities, not the local poor.

And he went on further to show that social limits in place many years ago at the time of slavery and segregation continue to influence heavily the level of opportunity for children.

It is probable that the same issue of a harder social mobility is at play in most developed countries, and this also explains the disarray of a new generation that does not believe it will have better opportunities than their parents. At the same time, the work of people like Raj Chetty shows ways to understand and fix those issues.

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How the Failure of Autonomous Cars Shows the Limits of Self-Taught AI

There was a great hope of quickly achieving autonomous driving but it appears that this dream has to be postponed quite a few years. A good summary is exposed in this Quartz article ‘Autonomous vehicles: self-driving car wreck‘

The key point I find is the following. “AV researchers assumed driving enough test miles would lead to self-driving cars, an idea that emerged from an influential 2009 white paper by Google researchers, “The Unreasonable Effectiveness of Data”. It demonstrated how […] sufficient data could solve (most) problems“.

“Driving, it turns out, isn’t one of them. The open road is too complex, and there are too many unexpected dangers to design a self self-driving system from data alone. AV companies are now shifting gears and building “safety cases” borrowed from the aviation and safety industries that identify and solve for possible points of failure. This detour means AVs will arrive later than once thought.“

This extract shows that there are limits to self-taught AI and the associated certification challenges. The future probably lies in a mix between AI and deterministic programming.

This failure has probably more importance than noted, and shows that many hopes of a purely self-taught AI technology to solve complex problems is possibly an illusion. It has not yet stopped the AI tech-bubble, let’s expect some more disappointments in this area!

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How the Notion of Country Is Becoming Progressively Obsolete

As reminded in this excellent post by Gapingvoid, the notion of country is quite recent (the formalization of the concept of nation dating back to the Peace of Westphalia (1648)). It is now under siege, and actions are being taken in real life that show its limits: “The Kingdom of Denmark has just appointed a new Ambassador… not to a country, but to Silicon Valley“.

There is thus an increased recognition that large corporations of the Collaborative Age may have a larger influence on our lives than smaller countries. At the same time the notion of nationalism shows its limits in an open, more connected world (even if there is a temporary reaction against international trade, it remains and will remain a major economic factor).

There is at the same time a pull-back towards one own’s community (smaller entity than the nation-state) and the feeling of belonging to a wider, more international community through our social networks and through supra-state entities such as the European Union. Power is hoarded by large global corporations. At the same time, the emergence of a nomadic elite is substantially changing the perspective of the society influencers towards a more global perspective. The central level of nation-state is progressively being voided, or at least becomes less important.

The nation-state was probably a temporary useful concept suitable to the Industrial Age. It is probably not adapted to the Collaborative Age and new governance levels will have to be implemented – probably a multi-layered governance with a much stronger global level.

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How Relentless Repetition is Essential for Communication

In this interesting post ‘Relentless Repetition – By Steve Clayton Chief Storyteller for Microsoft‘ an interesting account of the use of this technique is given within a large corporation.

People too often believe that developing and formalizing the message is the most important. It is not. Communicating it relentlessly, even if it may sound boring for the person communicating, is an essential discipline.

“When communicating, either in written form or especially verbally, it can become tiring very quickly to repeat yourself. You hear or read yourself saying the same thing over and over and begin to assume that everyone has heard what you have said once you have said it more than ten times.” Yet in this particular example (the vision for Microsoft) it is estimated that the CEO repeated the message probably more than 300 times to get it embedded throughout the organization.

Don’t hesitate to relentlessly repeat the message to get it embedded. It may sound boring but that’s the only way.

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